A business law blog published by the business lawyers at AttorneyBritt - Gary L. Britt, CPA, J.D. Commentary and information regarding the laws and regulations applicable to individuals, corporations, partnerships, and limited liability companies (LLCs); as they relate to the myriad of business transactions, contracts, and agreements every business owner, shareholder, member, physician, and/or health care provider must consider.

Wednesday, March 4, 2015

Claiming A Tax Deduction For Medical And Dental Expenses

Your medical expenses may save you money at tax time, but a few key
rules apply.

Here are some tax tips to help you determine if you can
claim a tax deduction:

You must itemize. You can only claim your medical
expenses that you paid for in 2014 if you itemize deductions on your
federal tax return. If you take the standard deduction, you can’t claim
these expenses.

AGI threshold. You include all the qualified
medical costs that you paid for during the year. However, you can only
deduct the amount that is more than 10 percent of your adjusted gross
income.

Temporary threshold for age 65. If you or your
spouse is age 65 or older, the AGI threshold is 7.5 percent of your AGI.
This exception applies through Dec. 31, 2016.

Costs to include. You can include most medical and
dental costs that you paid for yourself, your spouse and your
dependents. Exceptions and special rules apply. Costs reimbursed by
insurance or other sources do not qualify for a deduction.

Expenses that qualify. You can include the costs
of diagnosing, treating, easing or preventing disease. The costs you pay
for prescription drugs and insulin qualify. The costs you pay for
insurance premiums for policies that cover medical care qualify. Some
long-term care insurance costs also qualify. For more examples of costs
you can and can’t deduct, see IRS Publication 502, Medical and Dental
Expenses. You can get it on IRS.gov/forms anytime.

Travel costs count. You may be able to claim
travel costs you pay for medical care. This includes costs such as
public transportation, ambulance service, tolls and parking fees. If you
use your car, you can deduct either the actual costs or the standard
mileage rate for medical travel. The rate is 23.5 cents per mile for
2014.

No double benefit. You can’t claim a tax deduction
for medical expenses you paid for with funds from your Health Savings
Accounts or Flexible Spending Arrangements. Amounts paid with funds from
those plans are usually tax-free. This rule prevents two tax benefits
for the same expense.

Use the tool. You can use the Interactive Tax Assistant tool on IRS.gov to see if you can deduct your medical expenses. The tool can answer many of your questions on a wide range of tax topics.